The May meeting of Poland’s Monetary Policy Council will take place in an environment of relative economic stability, but also amid growing uncertainty on global markets. Following an earlier interest rate cut in 2026, the MPC is now in a phase of observing the effects of its monetary policy decisions. The Council’s key task remains to keep inflation close to the National Bank of Poland’s target of 2.5%, with a permitted deviation of 1 percentage point in either direction.
Inflation in Poland has clearly slowed in recent months and remains close to the central bank’s target. This means that price pressure in the economy is significantly lower than in previous years. At the same time, some categories, especially services, continue to record relatively faster price growth, suggesting that the process of returning inflation to a stable level has not yet been fully completed.
The economic situation remains relatively good. Economic growth is moderate, supported by household consumption and the gradual recovery of investment. The labour market remains stable, while unemployment is still low. At the same time, wage growth has begun to stabilise, limiting the risk of renewed inflationary pressure.
On the financial market, signs of greater investor caution have recently become visible. Rising IRS rates and yields on some debt instruments suggest that market participants are no longer as confident about further interest rate cuts in the near term. Expectations regarding future monetary policy have become more varied, with some investors assuming that the current level of rates may be maintained for a longer period.
An additional element of uncertainty is the geopolitical situation in the Middle East, particularly tensions linked to Iran. This conflict is affecting energy commodity prices, especially crude oil, which have recently increased. Higher energy prices could again add to inflationary pressure in the future, which is an important risk factor from the central bank’s perspective.
Taking into account the current macroeconomic environment and the situation on financial markets, the most likely scenario for the May meeting is that interest rates will remain unchanged. Such a decision would allow the Council to assess the impact of its previous actions on the economy and observe inflation developments in the coming months.
Further interest rate cuts remain possible, but they are unlikely to come immediately. The MPC may adopt a more cautious approach, especially given the risk of higher energy prices and uncertainty on international markets. Interest rate hikes, on the other hand, appear unlikely, as the current level of inflation does not indicate a need to tighten monetary policy again.
If the MPC decides to leave interest rates unchanged, the reaction of financial markets may be limited, as this scenario is largely expected by investors. A stable level of interest rates would mean broadly unchanged financing costs for households and businesses.
For the foreign exchange market, no change in monetary policy may imply relative stability for the zloty, while the bond market will continue to react primarily to changes in global sentiment and inflation expectations.
The May meeting of the Monetary Policy Council is therefore unlikely to bring any significant changes in interest rates. Stable inflation and moderate economic growth support maintaining the current monetary policy stance. At the same time, external factors such as geopolitical tensions and commodity price volatility mean that the MPC may remain cautious and postpone any further decisions on interest rate changes until the following months.
